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29 (124) 2017
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HR & Professional Qualifications

Self-management and leadership: an oxymoron?

by Dr Jan Nowak, director of MBA programmes at IBD Business School in Warsaw
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In his book Reinventing Organizations (Nelson Parker, 2015), Frederic Laloux wrote “Many people sense that the way organizations are run today has been stretched to its limits.

A leader is best
When people barely know he exists,
Not so good when people obey and acclaim him
Worse when they despise him,
But of a good leader, who talks little
When his work is done, his aim fulfilled
They will all say “We did it ourselves”
Lao Tzu

In survey after survey, businesspeople make it clear that in their view, companies are places of dread and drudgery, not passion or purpose.” According to Laloux, the answer to this workplace plight are self-managing organisations that also represent a more soulful and purposeful way to run businesses and non-profits. Such enlightened organisations are called ‘teal organisations’.

‘Teal’ is not an acronym, but a colour, a greenish-blue. Laloux uses colour symbolism in delineating phases of evolution of the organisation, from red, to amber, then green and on to teal. The creation of teal organisations is inspired by shift to the next stage of human consciousness, currently underway.

Self-management – from self-organising teams to self-managing organisations

Self-management is not a new concept. Back in the early 1950s, miners in South Yorkshire began spontaneously organising themselves into multi-skilled, autonomous groups, whose productivity soared. Self management gained popularity in the 1970s and ‘80s.  They became synonymous with participative management and industrial democracy (Europe), continuous improvement (Japan) and innovation (USA). Self-managing teams contributed to reduced defects (or service errors), increased productivity and cost reductions. They continued to be popular in the 1990s, promising higher productivity and more adaptability in environments subject to rapid change.

In more recent years, it’s become apparent that self-managed teams don’t require organisational hierarchy with heavy-handed control from the top. If self-management of teams can be more effective than managing them from the top, why not extend the principle to entire organisations? If that happened, why would we need  hierarchy and layers of managers? Indeed, a Harvard Business Review article on Beyond the Holacracy Hype (Jul-Aug 2016) reports C&S CEO Rick Cohen visiting Harvard Business School, more than a decade earlier, to speak about his company’s success with self-managed teams, and saying to the students that “the hardest thing is to keep the managers out of the process and just let the teams do what they do.”  

In a similar vein,  in December 2011 issue, Harvard Business Review published an article authored by the management guru, Gary Hamel, with a poignant title: First, Let’s Fire All the Managers. Gary Hamel began by saying: “Management is the least efficient activity in your organisation” and continued: “Think of the countless hours that team leaders, department heads, and vice presidents devote to supervising the work of others. Most managers are hardworking; the problem doesn’t lie with them. The inefficiency stems from the top-heavy management model that’s cumbersome and costly”. Hamel used Morning Star, an American tomato processing company, the world’s largest and arguably the world’s most efficient tomato processor, as a case to prove that companies are better off without organisational hierarchy and top-down control. Morning Star was also among the dozen companies studied by Laloux as examples of teal (self-managing) organisations.

Is leadership superfluous in self-managing organisations?

In such organisations self-management replaces hierarchical pyramid and leadership becomes distributed and servant, which means that there’s no formal management structure with subordinates reporting to superiors. Does that mean that leaders are not needed?  After all, teams organise themselves, set their own objectives and decide how to best achieve those objectives! Even though there’s an assumption of no control form the top in a self-managing organisation, the lack of leadership is a myth. Frederic Laloux wrote: “The Teal Organizations in this research have formidable founders or CEOs – it takes inspired and courageous leadership to build organizations that are ahead of their time” (Reinventing organizations, p. 167).  

The leaders of self-managing organisations don’t have hierarchical power, but they often carry much authority. They are usually aware that their presence, words, and actions carry particular weight. They are role models. These are the leaders who have given up power and control – a very difficult thing to do! Some, like Yann Gontard, the CEO of Sodexho’s Corporate Segment Central and Eastern Europe, have even given up their corner offices and share office space with staff, such as accountants. In return, they have gained time, which they use to inspire, consult and serve. They have become more authentic and gained trust, thus releasing employees’ energy, motivation and enthusiasm, sometimes on an unimaginable scale.  
   
A leadership transformation to run a self-managing organisation is both indispensable and very difficult. Laloux wrote: “Fighting the inner urge to control is probably the hardest challenge for founders and CEOs in self-managing organisations” (Reinventing organizations). One of the most important responsibilities of teal leaders is to keep the organisation on a self-managing course and not let it revert to a traditional, hierarchical structure, even if it is hit by a crisis.

Of course, managing in teal-type organisations is quite different from managing in traditional management structures. It is less about supervision and direction and more about designing, inspiring, facilitating, and coaching. And yet, leadership is not less relevant. On the contrary, it is even more important, although totally different.  “You have to lead by example and round up the troops rather than rely on authority” say the authors of the Harvard Business Review article on Beyond the Holacracy Hype.

Self-managing organisations in Poland

A number of companies in Poland have been reported to experiment with self-management. They include: Marco (Gliwice), Kamsoft Podlasie, Masterpress, LeaNCe, Muszynianka, POL-MAK, Parasol Roztocza Foundation, Coders Centre, Sodexho, NotJustShop, GEP Poland, and Polmo Łomianki. They are at different stages of self-management, but they have all tried to become  organisations with less control from the top and more self-managed teamwork, and have, in one way or another, succeeded in creating a better work environment for their employees. Some of the leaders of these organisations have gone through a profound transformation. For example, Tomasz Misztal, the CEO of Kamsoft Podlasie, told the audience at the last year’s conference in Warsaw (Firma z Duszą, October 24, 2016) a compelling story of his transformation from a red to a a teal leader, to use Laloux’s terminology. He remarked: “The more I tried to control, the less effective I was as a leader”. Today, Kamsoft operates according to most of the self-management rules. Employees are organised into self-managing teams and make the majority of operational decisions themselves. There are no individual KPIs, no bonuses, salary differences are small and the profit is equally divided among the managers and employees. The CEO has more time to listen to his colleagues, help  and facilitate their self-management. He has now time to engage in new ventures that he develops according to the teal-organisation concept!

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